Square Enix in 2010: President Wada Speaks

Since the last time Gamasutra got to sit down with Square Enix president and CEO Yoichi Wada, the company has had a year to integrate the Final Fantasy creators' latest acquisition, Eidos -- and we now know that its early promises of meaningful and binding ties between the two companies, no matter how different their styles, was truthful.

For one example, we know that an Eidos employee, Julien Merceron, has been named the company's worldwide technology director, and has created an atmosphere of collaboration between the company's Japanese, European, and North American studios.

It's also clear from speaking to Wada that he sees Tomb Raider and Hitman creator Eidos fitting in as a vital part of the overall organization.

In this interview, he discusses his company's overall strategy, his view toward integrating companies into a whole and the possibilities of more acquisitions by Square Enix, and the current state of game development in Japan, as troubled as it is, among other topics.

Things have been moving rapidly towards integration since the acquisition of Eidos. From your perspective, how has that integration been going? Are you satisfied with the progress?

Yoichi Wada: In terms of the organization-wide integration with Eidos, we were able to complete it in one year, and I'm very satisfied with that. And this integration was completed with the creators being highly motivated, so how it has been done has left us in a very favorable position.

So what's important is where to go from here; we have become a good family now. What to do, as a family, going forward, is what's important, and I'm really looking forward to what we can do together as a family.

It seems that with most companies that have a Japanese side and a Western side, there's not much actual integration, but you're actively pursuing that. From both a technology and a creative standpoint, it seems like a big challenge. Do you think that you're entering uncharted territory?

YW: I know I don't feel that way, because, to start with, our company was the result of a merger between Square and Enix. Then we bought out Taito, then we bought Eidos. Every time we had an acquisition, we became a new company, and of course there are challenges, but doing these kinds of deals has always become a driver for growth for our company. We respect each other's culture, and try to coexist with these different cultures, and through these interactions, we generate something new.

We consider these moves as strategic moves for the growth of the company. When we acquire another company, it's not simply for the purpose of becoming a bigger entity. The purpose is to bring in fresh air and different blood, by mixing with something totally different. Our intention is to become a stronger organization. This navigation may not have a chart, but the navigation is intentional.

Some ten years ago, Square, Enix, Taito, and Eidos were all separate companies. Is consolidation a general trend in the industry, or simply part of the plan for your business?

YW: From my perspective, it is a part of my plan.

From 2000 to 2010, we've seen the first phase of a major reformation of the industry. I had an idea it would happen, and I also figured that, from 2010 onward, we'd see further large-scale restructuring of the industry, even involving businesses outside of the game industry.

Considering this, I concluded that there was a limit to what we could do with the wholly independent business culture we worked within [as Square alone]. This was the way we were thinking ever since I was appointed president of Square in 2001.

However, independent of this, after Square Enix was born, Japanese companies started merging with each other like clockwork. In terms of how it turned out, therefore, it did wind up being a trend, or a trigger, but it wasn't our intention to kick off a trend.

What's the motivation, and how do you pursue these business opportunities? Is it to simply to bring in different blood, as you said? Taito has its amusement business, Eidos is strong in Western development. Are you going to continue to look at new opportunities?

YW: I have always thought that it would only be a matter of time before a wide range of people would start playing games. Ten or 20 years ago, games were considered to be a very special, unique type of entertainment which appealed only to a very small demographic group. Even then, I was thinking that soon the whole wide world -- not just young men, but also adults, women, and people of different demographic profiles -- would start playing games, too.

Given the situation then, games were being created by young men, and there were so many things that the people who were creating the games did not understand. I thought that as games would eventually be for both the old and the young and for men and women, we would have to have a wider range of creators. Without a wider skill set, or people with wider backgrounds, I felt that I would not be able to fight in this new battlefield. And as a means to acquire the skills to fight with, I repeated this strategy of mergers.

Are you still open to possible mergers and acquisitions in the future?

YW: Of course, I would always pursue one when the right opportunity arises. What I mean to say is, take this premise: new culture is needed. For example, let's say there's a need for social networking type services -- but when it comes to that, maybe the resources we have today may not be enough to address that market's needs.